LITTLE ROCK — The state of Arkansas’ accusations of Medicaid fraud against Johnson & Johnson are based on bad science, the company’s attorney said Tuesday.
“The state government is wrong about Risperdal,” attorney Jim Simpson told Pulaski County jurors in his 47-minute opening statement. “It’s wrong about the science. There is no evidence Medicaid was defrauded.”
Risperdal is one of the world’s most widely prescribed antipsychotics. The state contends the manufacturer committed fraud by hiding the drug’s potentially dangerous side effects, putting Arkansas Medicaid patients at risk, particularly children and the elderly.
With its benefits far outweighing the risks, Risperdal is a “revolutionary breakthrough” in treating diseases such as schizophrenia and conditions suchas bipolar disorder, Simpson said. The medication became the “first line of treatment” in Arkansas and a 2001 state Medicaid review of the drug endorsed it.
If there was something wrong with Risperdal, the state Medicaid program could have restricted its use or pressured federal regulators into restricting it, he said, but no one involved in running the program ever found any fault with the drug.
Jurors should reject fraud accusations, Simpson said, also calling on the six men and six women hearing evidence before Circuit Judge Tim Fox to reject deceptive marketing allegations against Johnson & Johnson. He said state attorneys have no evidence that any Arkansas patient has been harmed by Risperdal, no evidence the New Jersey-based company deceived any doctor in the state about the medication or influenced any physician to wrongly prescribe it. He called on jurors to reject the state’s accusations.
Attorney General Dustin McDaniel sued Johnson & Johnson and Janssen Pharmaceuticals, the subsidiary that makes the drug, in 2007, claiming violations of the Arkansas Medicaid Fraud False Claims Act and the Deceptive Trade Practices Act. State attorneys are seeking fines - all to be levied after trial by the judge, not the jury - of at least $1.25 billion on the Medicaid fraud accusations, representing every Risperdal prescription paid for by the state Medicaid program between November 2002 and June 2006. The law allows fines from $5,000 to $10,000 per violation. Authorities report about 300,000 prescriptions were written for the drug through the state’s Medicaid program.
The state also cites about 20,000 instances of improper marketing and labeling as deceptive trade violations, with maximum fines of $10,000 each for a possible additional $200 million.
The trial is scheduled to last three weeks. The parties have listed more than 50 witnesses and have indicated more than 600 items could be submitted as evidence.
In the suit, the state argues that Johnson & Johnson committed fraud by concealing or downplaying side effects of the medication, including:
Substantial weight gain that can cause diabetes.
Unhealthy levels of the hormone prolactin.
In elderly patients, increased chances of fatal heart attacks and stroke.
Johnson & Johnson’s marketing and labeling of the medication misrepresented Risperdal’s safety to patients, state lawyers claim in court filings.
Risperdal’s side effects have never been secret, Simpson said, and the drug has always carried the appropriate warnings as mandated by federal regulators, although Johnson & Johnson hasn’t always agreed those warnings were appropriate. The U.S. Food and Drug Administration “approved every word of this label,” he said, with regulators even prescribing the size of the lettering in the warning. The FDA has repeatedly approved the use of Risperdal, he said.
The company is committed to public safety, Simpson said, with the risk of a patient developing a blood-sugar disorder such as diabetes or hypoglycemia “very rare” - about two one-thousandths of a percent.
He told jurors not to put any stock in two Janssenbacked studies, referred to as E.R.I. and 113, cited by state lawyers as proof that Johnson & Johnson was deceptive. The studies were never disclosed to FDA regulators, Simpson said, because they were incomplete and “full of errors and holes.”
“Janssen wouldn’t submit ... bad science,” he said.
Representing Arkansas, attorney Fletch Trammell asked jurors not to let Johnson & Johnson sway them that it has done nothing wrong because Risperdal has federal approval. Approval “doesn’t mean they get to break the law,” he said. Federal approval is on the “honor system,” he said, with regulators forced to rule on drugs based on data provided by the manufacturers, and in this case the manufacturer has not been honest.
The company lied to Arkansas patients and doctors as part of its efforts to dominate the market on antipsychotics, particularly over rivals such as Zyprexa, Trammell said, building a marketing strategy on untrue claims that Risperdal was safer than its competitors.
“We will prove to you that Janssen lied just to make more money,” Trammell said in his 39-minute opening statement.
The company hid or tried to conceal Risperdal’s impact on prolactin levels, which can cause “very disturbing sexual side effects” in children, Trammell said. It didn’t disclose that elderly patients were more susceptible to fatal or incapacitating side effects such as stroke and vascular problems, he said.
The 113 study is proof of the company’s bad acts, Trammell said. The head-to-head comparison to Zyprexa in the 113 study was the “gold standard” of testing, but its results were “disastrous” for the company because it proved Risperdal was no safer than its competitor, so the testing results were “buried,” he told jurors.
“They buried it. ... It’s too damaging. It would cost too much money” in lost sales, he said.
The E.R.I. study, though not as thorough as the 113 study, showed similar results and met a similar fate, Trammell said.
“At this point, everybody in this courtroom knows more [about the studies] than doctors in this country,” he said. “The truth will cost them too much money.”
This trial is not about contesting the effectiveness of Risperdal, Trammell said, describing the medication as effective for the “right” patients - not too old or too young. Trammell urged the jury not to fall for claims that Arkansas Medicaid officials could have interceded sooner.He said the state agency, run by the Arkansas Department of Human Services, cannot intervene when federally approved medications are legitimately prescribed.
Johnson & Johnson has acknowledged it has been in negotiations with federal prosecutors over Risperdal involving a violation of the Food, Drug and Cosmetic Act. The Philadelphia Inquirer reported on Tuesday that government lawyers want the company to pay $1.8 billion to settle criminal and civil charges, which the newspaper reported would be a record for a single drug company.
A Texas judge on Tuesday approved a $158 million settlement between Johnson & Johnson and that state to settle allegations over Risperdal. The Bloomberg News service reported 40 percent will go to Texas, 31 percent to the federal government, 17 percent to whistle-blower Allen Jones, who initiated the lawsuit, and the rest to Jones’ attorneys. The agreement leading to the settlement ended a Texas trial in January.
In October 2010, a Risperdal suit by the Louisiana attorney general resulted in a record $330.7 million judgment currently on appeal, while a similar suit by the South Carolina attorney general earned a state-record $327 million judgment at triallast year.
McDaniel has also targeted Eli Lilly & Co., the maker of Zyprexa, and AstraZeneca Pharmaceuticals, the maker of Seroquel, a similar medication, resulting in total settlements of $22.5 million but no admissions of wrongdoing.
Front Section, Pages 1 on 03/28/2012